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🇳🇬 Nigeria /Energy & Infrastructure

Nigeria's oil reserves not enough to win investors, warns PENGASSAN

From The Punch · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Official statement Context piece
  • Nigeria's oil and gas reserves are insufficient to attract global investment capital in the current competitive market, according to PENGASSAN.
  • The union urges Nigeria to offer competitive fiscal terms, improved security, and predictable regulations to attract investors.
  • Despite the Petroleum Industry Act, concerns about regulatory uncertainty, policy changes, and security challenges persist, hindering long-term capital investment.

Nigeria, despite possessing one of Africa's largest hydrocarbon endowments with approximately 37.01 billion barrels of proven oil and 215.19 trillion cubic feet of natural gas reserves, can no longer solely rely on the sheer size of these resources to attract global investment capital, warns the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).

The union emphasized that Nigeria is in direct competition with other oil-producing nations for a limited pool of global capital. To succeed in this environment, the country must provide investors with competitive fiscal and commercial terms, enhanced security, predictable regulatory frameworks, and efficient project execution. These points were highlighted in a communiqué issued at the end of the 5th PENGASSAN Energy and Labour Summit in Abuja.

Nigeria competes with other jurisdictions for finite global capital and cannot rely solely on the size of its hydrocarbon resources to attract investment. The country must offer competitive fiscal and commercial terms, security, predictable regulation and efficient project execution.

— PENGASSAN CommuniquéStating the core argument from the PENGASSAN summit regarding investment attraction.

The summit, themed "Strengthening Regulatory Frameworks as a Catalyst for Stability and Growth in Nigeria’s Oil and Gas Industry," brought together various stakeholders to discuss the conditions necessary for attracting investment, boosting production, and sustaining employment in the petroleum sector. PENGASSAN acknowledged the significance of the Petroleum Industry Act (PIA) signed in 2021, which aimed to provide a clearer legal and commercial framework.

However, industry stakeholders continue to express concerns regarding regulatory uncertainty, frequent policy shifts, delays in approvals, security issues, and the high operational costs within Nigeria. PENGASSAN stressed that the mere existence of legislation is insufficient to secure the long-term capital required for major petroleum projects. The association urged the Federal Government and regulators to build upon recent reforms and incentives to ensure Nigeria remains internationally competitive for energy capital.

The long-term capital required for oil and gas development depends not only on the existence of law

— PENGASSANHighlighting the insufficiency of legislation alone for attracting investment.
DistantNews Editorial

Originally published by The Punch in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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